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Online shopper base grew by ~25% (YoY) during festive season; 57% of total shoppers are from Tier 2+ cities: RedSeer

$9.2 billion worth of goods were sold online during the festive sales in 2021. The sales were dictated by affordability schemes. Mobile phones remained the highest sold category

Recent figures released by the consulting firm RedSeer indicate that India witnessed its biggest ever festive sales with brands clocking a GMV of $9.2 billion through online channels over this period in 2021.

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Incidentally, RedSeer came remarkably close in predicting this figure with its forecast of $9.6 billion for this year’s GMV falling within just a ~5% range of the actual figure ($9.2 billion).

As has been the case for the last five years or so, online festive sales in India continued to grow at a blistering pace and saw a 23% YoY growth in Gross Merchandise Value (GMV).

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A slew of new launches and easy financing options meant that mobiles continued to remain the most widely-sold product category during this time, accounting for more than a third of the total GMV.

With hoards of people finally getting to leave their homes after months of lockdown, the fashion category witnessed a resurgence like never before. Driven by consumers’ desire to refresh their wardrobes and new innovative business models catering to shoppers in Tier 2 cities, the sales of fashion items via online channels doubled this year.

On the other hand, the categories that witnessed subdued growth this year included the likes of home furnishings, home décor, furnishings and other electronics.

The overall online shopper base grew by ~25% compared to last year with 57% of the total shoppers coming from Tier 2+ cities. This meant that this year’s festive sales were dictated by affordability schemes.

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While the overall online GMV and the absolute number of shoppers both increased, the GMV per user declined from  Rs 6,570 to  Rs 6,490 as relatively less expensive items such as fashion products saw an increase in their share of the overall GMV.

The Flipkart Group emerged as the leader during the festive sales with a 62% market share.

Rising consumer demand certainly contributed to the growth of overall GMV during the online festive sales. However, eCommerce platforms also deserve credit for the steps they took to further boost this demand.

Strategies to boost demand included:

  1. High pre-sales marketing and campaigns including a “curtain-raiser event” to reveal sale prices and “pre-book” items at discounted prices.
  2. Enabling affordability through banking partnerships and seller-driven discounts on aspirational brands to bring the most competitive price to customers.
  3. Warehouse and demand planning to fulfil orders to the customers much quicker.

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